CommScope To Realign Into Four Business Segments in 2020
The realignment supports long-term strategy and market leadership in core areas, said CommScope.
Global network technology company CommScope has announced that it will transition to a new operating model and segment reporting structure, effective January 1, 2020. This is expected to help better capture the strategic value resulting from its acquisition of ARRIS and Ruckus Networks. To that end, CommScope will operate and report its financial performance in four segments—Venue and Campus Networks; Broadband Networks; Outdoor Wireless Networks and Home Networks— aligned to the primary growth opportunities related to its goal of shaping the most advanced networks of the future.
In addition to improving CommScope’s execution of its strategy and helping to unlock the full potential of its end-to-end portfolio of networking equipment, the company expects this realignment to help CommScope take advantage of greater revenue and cost synergy potential within its current business, further improving market leadership positions.
“Since completing the ARRIS acquisition in April, we have created a powerful company with what we believe is the most compelling and diversified global portfolio of industry leading technologies for enterprise and service provider customers,” said CommScope’s President and Chief Executive Officer Eddie Edwards. “We expect our new operating model will enable us to realise significant benefits of cost and revenue synergies, strengthen our technology leadership, and support our long-term growth strategy. By bringing similar technology and product platforms together, we will accelerate end-to-end networking systems development, be able to shape the most advanced networks of the future and help our customers unlock the full potential of the coming 5G revolution.
“This new structure reinforces our goal to solve our customers’ problems faster, with a higher level of efficiency and innovation. With this portfolio realignment and more efficient operations, CommScope will accelerate its mission to push the boundaries of technology and deliver on our commitments to deliver growth, substantial cash flow, higher profit margins, and a scalable operating model. Our new structure seeks to provide all stakeholders with a greater level of transparency into the drivers of performance in the business, to drive better resource allocation decisions and strategic alignment.”
Additional detail on the four business segments:
Venue and Campus Networks – Targeting both public and private networks for campuses, venues, data centers, and buildings, this segment will combine the current Ruckus Networks, Enterprise and Distributed Coverage and Capacity (DCCS) businesses. It includes Wi-Fi and switching, distributed antenna systems (DAS), licensed and unlicensed small cells, and enterprise fiber and copper infrastructure. With year-to-date pro forma net sales of approximately $1.6 billion through September 30, 2019, this segment has several product lines that are expected to grow rapidly, and can provide a completely differentiated, integrated offering. The Venue and Campus Networks segment will be led by Ben Cardwell. Cardwell has been with CommScope for more than 15 years and has served in a variety of senior sales and segment leadership roles, most recently as senior vice president and segment leader for the CommScope Mobility Solutions and Connectivity Solutions segments.
Broadband Networks – This segment, with year-to-date pro forma net sales of approximately $2.1 billion through September 30, 2019, will position CommScope as the leading North American equipment manufacturer with an end-to-end product portfolio serving the telco and cable provider broadband market. The new segment combines the existing Network Cable and Connectivity business with the Network & Cloud business. This segment will drive growth in CCAP, PON, Video Systems, Access Technologies, Fiber and Coaxial Cable, Fiber and Copper Connectivity and hardened closures. The Broadband Networks segment will be led by Kevin Keefe, an industry veteran with more than 25 years of experience. Keefe joined CommScope through its acquisition of ARRIS, where he served in a variety of business leadership roles, most recently as senior vice president and segment leader for the CommScope Network & Cloud segment.
Outdoor Wireless Networks – Consisting of the company’s RF Products and Integrated Solutions groups, this segment, representing year-to-date pro forma net sales of approximately $1.2 billion through September 30, 2019, will focus on the Macro and Metro Cell businesses. It will consist of Base Station Antennas (BSA), RF Filters, Tower Connectivity, Microwave Antennas, Metro Cell and cabinets/steel, accessories, SAS and Comsearch. As the company’s wireless operator customers shift a portion of their 5G capital expenditures from the macro tower to the metro cell, CommScope’s differentiated offerings and portfolio can support a smooth and cost-effective transition for customers. The Outdoor Wireless Networks segment will be led by Farid Firouzbakht. Firouzbakht has been with CommScope for more than 15 years and has served in a variety of business leadership roles in the wireless space, most recently as senior vice president and leader of the RF Products business unit within the CommScope Mobility Solutions segment.
Home Networks – Comprising the current Consumer Premises Equipment (CPE) business, this segment, which represents year-to-date pro forma net sales of approximately $2.6 billion through September 30, 2019, will focus on the future of the connected home and devices inside the home. Anchored by CommScope’s broadband gateways (coaxial, fibre, and wireless), video set-tops, and in-home devices, this business will continue to provide the industry-leading technologies for providing broadband services to and inside the home. The Home Networks segment will be led by Joe Chow. Chow joined CommScope in August 2019 and has served in variety of business leadership roles in the CPE industry for nearly 20 years, most recently as senior vice president and segment leader for the CommScope CPE segment.
The realignment will be reflected in CommScope’s first quarter 2020 financial results. Going forward, CommScope will provide customary segment data on the new segment basis.